< Previous38 CEO MIDDLE EAST 16-30 NOVEMBER 2023 hen looking for ways to generate alpha in finan- cial markets, fundamental research stands as one of the best ways to find long-term winners that gener- ate returns above the market average. This especially holds true when waters are choppier, and markets are more volatile. While fundamental research is an approach oftentimes utilised for equity markets, it doesn’t exclusively apply to equities. Crypto markets, due to their early stage and volatile nature, are benefitting heavily from fundamental analysis of companies, which can lead to strong alpha generation and portfo- lio outperformance. Finding mispriced assets The post-global financial crisis (GFC) period of easy money is over and markets after the pandemic are more volatile, creating increased differen- tiation between equities. Cryptocur- rencies, too, have shown that a high level of differentiation exists between projects, opening the chance to find market-beating returns. One implication of this new invest- ment regime – which is characterised by higher inflation, rates and valu- ations – is lower market returns, or beta, suggesting a higher portion of portfolio returns will need to come from alpha. When stocks rose on a sea of cheap money after 2008, alpha strategies fell out of favour and fees for active funds became harder to justify. In contrast to that, ETFs were on the rise during this period of “passive” investing and be- came an important investment vehicle ever since then. With central banks raising rates, however, the ability to find gems amid the market noise is once again back in fashion. Geopolitical concerns, sup- ply disruptions, and data-dependent central banks committed to fighting inflation are likely to stoke bouts of volatility across time. The market dips WHY FUNDAMENTAL RESEARCH MATTERS FOR CRYPTO PROJECTS Crypto markets are benefi tting heavily from fundamental analysis of companies, which can lead to strong alpha generation and portfolio outperformance BY BY BILL QIAN, CHAIRMAN OF CYPHER CAPITAL & STEFAN PIECH, SENIOR INVESTMENT ASSOCIATE Alpha generation. Crypto markets are benefitting heavily from fundamental analysis of companies. TECHNOLOGY W16-30 NOVEMBER 2023CEOMIDDLE EAST39 TECHNOLOGY “EFTS WERE ON THE RISE DURING THIS PERIOD OF PASSIVE INVESTING.” Stefan Piech. Senior Investment Associate. Bill Qian. Chairman of Cypher Capital. inherent in volatility can lead to mis- pricing, presenting opportunities for active investors who purchase shares of companies (or tokens) with good prospects at a discount. Talking about volatility, supply disruptions, and idiosyncratic risks, it becomes inherent that cryptocurren- cies today have an increasing overlap with equities and that (while a sepa- rate asset class) equally benefit from fundamental research to find those that are mispriced in relation to their underlying fundamentals. Diving into the fundamentals of a company allows us to find the long- term winners in the space, independ- ent of where the project is trading. The benefits of fundamental research are manifold: 1. Company-level engagement and expertise A rigorous research and selection pro- cess by our team leads to thoroughly vetted, high-conviction investments. Equally important, it creates portfoli- os that can offer returns differentiated from the broader market. 2. Investment flexibility The ability to exercise discretion and react to changing market condi- tions allows fundamental investors to quickly capture opportunities and manage risks as they arise. 3. Enhanced diversification and return potential Having active strategies in your port- folio mix can help to diversify risk, and contribute to long-term objectives. 4. “Always-on” risk management Embedded risk management tools can ensure that risks taken are deliberate, diversified, and properly scaled. Fundamental research paves the way forward for investing in the digital asset space and allows to create portfolios that will weather the many storms of this vastly evolving space. crypto and traditional markets still ex- ist and require us to adapt accordingly. While financial metrics still matter, we now look at protocol revenue and to- ken incentives (amongst other things) to get a better sense of projects. Quali- tative evaluation of crypto projects includes analysing data related to ac- tive users, developer activity, competi- tive landscape, and token utility, which differs dramatically from traditional asset classes. One good way to look at crypto assets is from a top-down view, starting with understanding the industry landscape, before diving into projects and protocols and their respective tokenomics. A top-down approach to funda- mental research The distributed and public nature of blockchain technology presents investors with unparalleled access to data in a transparent and efficient manner. It also levels the playing field between institutional and retail users. As compared to traditional listed com- panies, which typically report their financials through quarterly reports, real-time data availability represents a massive improvement to the status quo in terms of the quality of inves- tor disclosures and provides investors with a strong insight into the market conditions. Digital assets are maturing As tokens become more popular as a form of capital formation, the similari- ties between equities and digital assets increase. Whereas finding alpha in traditional equities has become harder over the years with an increase in information efficiency, we can observe that digital assets still act similarly to equities in the 1960s, when Warren Buffet began to buy stocks in Berkshire Hathaway. Back when access to infor- mation was harder to come by, looking at the fundamentals of a business has proven to be one of the best ways to al- locate capital. As Peter Lynch used to say: “You have to learn that there’s a company behind every stock, and that there’s only one real reason why stocks go up. Companies go from doing poorly to doing well or small compa- nies grow to large companies.” However, despite the increasing maturity, intrinsic differences between 40 CEO MIDDLE EAST 16-30 NOVEMBER 2023 protect us from the hypothetical dan- gers of AI. The executive order’s intent to guide AI development is premised on fear rather than fact, a reflection of the administration’s apprehension about AI’s potential negative impacts. It’s reminiscent of early fears surrounding the advent of the personal computer, which never materialised into the dys- topias sci-fi pundits predicted. Had we allowed such fears to steer the industry then, we might have stifled one of the greatest catalysts to human progress. The White House’s executive order requires the Department of Commerce to develop guidance for AI-generated content with the hope that labelling the origins of text, audio, and visual content will make it easier for us to know what’s been created using AI on- line. The trouble that some AI experts point out is that technologies such as watermarks are still very much works in progress. There currently are no fully reliable ways to label text or investigate whether a piece of content was machine generated, so to put regulation on this without a sure-fire way to authenticate seems trivial and haphazard. AI has indeed become a central pillar of technological advancement, interwoven seamlessly into every aspect of software development. To segregate AI as a distinct entity from traditional software and demand its watermarking is to fundamentally misunderstand the digital landscape. Software is ubiq- uitous, and AI’s integration into it is not only inevitable but already deeply entrenched. The executive order’s de- mands for watermarking “AI content” is a major concern given our inability to distinctly define what AI content is. Does the use of Auto-Tune render a song AI? Is a digitally rendered Pixar movie AI? The White House’s new rules are a jumble of technical jargon and confus- ing directives spread across 111 pages. They seek to shape AI development with a heavy hand, which, while well- THE GLOBAL AI DOMINO EFFECT Segregating AI as a distinct entity from traditional software and demand its watermarking is to fundamentally misunderstand the digital landscape BY AARON ILLATHU IS AN ACCOUNT MANAGER AT ATTELINE Technological power. Illathu discusses how AI is misunderstood in the digital landscape. TECHNOLOGY T he Biden administration’s recent executive order on artificial intelligence (AI) has sparked debate within technologi- cal and policy circles. At a glance, the executive order seems like a proactive step towards ensuring AI evolves in a manner that’s secure and equitable. However, a closer analysis suggests it may do more to stifle innovation than 16-30 NOVEMBER 2023 CEO MIDDLE EAST 41 TECHNOLOGY “AI IS PROGRESSING AT A PACE WHERE ANY SET STANDARD IS OBSOLETE ALMOST AS SOON AS THEY ARE ESTABLISHED.” The AI effect. AI has become a central pillar of technology advancement. intentioned, risks hampering the tech- nology’s growth and the benefits it can bring. Think of it like trying to guide a river’s flow with a series of small dams; while you might direct the water where you want it, you also risk slowing the current to a trickle. Moreover, the executive order’s insistence on “outcomes” regulation is problematic. It suggests a predilection for pre-crime regulation, punishing potential rather than actual misdeeds. This ‘pre-crime’ approach might sound proactive, but it’s a bit like ground- ing a child for a week because they might break a vase. The focus is on the possibility of harm, not harm that has actually happened. Regulating the “methods and systems” rather than tangible outcomes is good for certain industries but not AI. For example, regulating safety to prevent accidents is reasonable and achievable. However, for AI it’s an approach that could lead to regulatory overreach and stifle the very creativity and risk-taking that lead to major breakthroughs. AI is progressing at a pace where any set standards will become obsolete almost as soon as they are established. Legislating based on the size or scope of models, for instance, is an attempt to quantify innovation and could place the US at a disadvantage on the global stage. Furthermore, the government wants to peek into how companies are build- ing and running their AI. This is like having someone who does not know how to cook, look over your shoulder every time you prepare a meal, ready to jump in if you reach for the wrong in- gredient. Not only does this undermine trust, but it also adds layers of red tape that could slow down innovation. And while the new rules are US policy, their ripple effects would be global. The US is a leader in AI, and how it regulates the technology will influence other countries. If American AI development slows down because of these rules, this could shift the balance sector as a whole, citing that the world needs to come together in a nonpoliti- cal fashion to have the safest and most impactful type of regulation. AI, like any transformative tech- nology, does present challenges that require thoughtful regulation. However, the type of regulation matters. We need policies that are outcomes-focused, that encourage innovation while pre- venting actual harm, not those that at- tempt to predict and penalise potential misuse. Regulation should be a scalpel, not a hammer; precise, narrowly tai- lored, and applied only where necessary to preserve the dynamism that has long been a catalyst for American technol- ogy leadership. In the end, the US government’s attempt to regulate AI could have con- sequences far beyond its borders. While aiming to protect us, it may instead constrain the growth of a technology with the potential to enrich lives glob- ally. It’s crucial to find a balance that fosters innovation and keeps us safe, without putting unnecessary handcuffs on the boundless potential of AI. Regu- lations should be smart, just like the AI they seek to govern, ensuring the river of progress flows freely and benefits everyone it touches. of technological power. Countries like China and India, with fewer regula- tions, could surge ahead, impacting global competition and potentially leading to a technology landscape where the US no longer sets the pace. Countries like the UAE, have put the right infrastructure in place, appointing the world’s first minister of Artificial Intelligence, His Excellency Omar Sultan Al Olama to lead the UAE’s AI strategy and digital economy initia- tives. His Excellency has a clear vision for establishing the country as a global leader in AI and technology and will be observing what the rest of the world is doing to find ways to complement the 42 CEO MIDDLE EAST 16-30 NOVEMBER 2023 he warehousing and logistics industry is undergoing a revolutionary transfor- mation through advancements in automation. According to market research, the warehouse automation market in the Middle East region is expected to more than triple in size in 2025, reaching a value of $1.6 billion. Robots and advanced machinery are deployed in warehouses for a vari- ety of operations, including storage, packaging, trans-shipment, and other related tasks. According to PwC’s Middle East Hopes and Fears 2022 survey, companies in the Middle East are utilising technology to automate and improve workplace processes at a slightly higher rate (32 percent), compared to the global average. The Middle East and North Africa (MENA) region, with its expanding population and industrial progress, stands to gain significant advantages from adopting automation solutions. As environmental awareness grows in the region, particularly compounded by the upcoming United Nations Climate Change Conference (COP28) hosted by the UAE in 2023, technolo- gies that promote sustainability and environmentally friendly results gain a competitive edge. Reducing carbon emissions with automation Global energy-related CO2 emissions reached a new record high of over 36.8 billion tonnes in 2022, experiencing a growth of 0.9 percent, or 321 million tonnes, according to a report by the International Energy Agency (IEA). The transportation sector, includ- ing logistics, plays a substantial role in contributing to these emissions. One effective approach is to replace manual handling with electric auto- mated machines. Electric automation technologies, such as robotics, rely on less electricity, which can even be generated from renewable energy or cleaner sources. Additionally, auto- WHY AUTOMATION IS A GAME-CHANGER FOR GREEN LOGISTICS The Middle East and North Africa region, with its expanding population and industrial progress, stands to gain signifi cant advantages from adopting automation solutions BY RAMI YOUNES, GENERAL MANAGER AND HEAD OF SALES, SWISSLOG MIDDLE EAST Game changer. Younes discusses how the logistics industry is undergoing a revolutionary transformation. TECHNOLOGY T16-30 NOVEMBER 2023 CEO MIDDLE EAST 43 TECHNOLOGY “THE WAREHOUSE AUTOMATION MARKET IN THE MIDDLE EAST IS EXPECTED TO MORE THAN TRIPLE IN SIZE BY 2025 TO $1.6B.” Leveraging robotics. The use of robotized storage presents an effective solution to the issue of limited space. mated technologies are far quieter than fleets of fossil-fuel-powered vehicles. This transition can pave the way for a notable decrease in emis- sions in the region. Leveraging robotics for space optimisation The Middle East has experienced significant growth in urban popula- tions over the past few decades, and as a result, the e-commerce market in this region has accelerated and is projected to have reached $37 billion in 2022, according to market research. To overcome the challenge of limited space and meet the high demand, the use of robotized storage and order processing systems presents an effec- tive solution. These systems enable better utilisation of storage space. The robots employed in this setup are designed to be highly energy-efficient, consuming only 0.1 kW of energy per hour. To put this into perspective, six of these robots consume the same amount of energy as a toaster. This not only helps save space but also re- duces the overall energy consumption required to operate larger facilities. Reducing energy consumption The region has been actively embrac- ing clean energy technologies. Ac- cording to the International Renew- able Energy Agency (IRENA), the Middle East achieved its largest-ever surge in renewable energy capacity in 2022, with the installation of 3.2 gigawatts of new capacity, indicat- ing a notable 12.8 percent increase. In line with this focus on energy efficiency, automation technologies offer a fitting solution. For instance, advanced high bay warehouse pallet stacker cranes, designed with sustain- ability in mind, harness regenerative power and braking modules to deliver industry-leading efficiency, resulting in energy-saving. With this innova- tion, warehouses can significantly reduce their energy consumption and distribution hubs. This strategy aligns perfectly with the ambitious goals set by regional governments which aim to expedite the transition to clean energy, achieve sustainability objectives, and attract investments. Moreover, there is a growing demand for environmentally friendly logistics globally, with 75 percent of shippers actively seeking greener options when exporting goods, according to a World Bank report. In addition to the numerous environmental advantages, the reduc- tion of manual handling of goods through automation minimises the risk of product contamination or tampering, benefiting industries such as food, beverage, and pharmaceuti- cals. However, automation’s greatest virtue is that it enables the adoption of greener practises. The continuous advancements in automation technol- ogy offer limitless possibilities for further environmental improvements, making it a crucial tool in building a greener future for the MENA region and beyond. decrease their reliance on non-renew- able energy sources. Achieving supply chain sustain- ability The growing emphasis on sustain- ability is leading to a shift in supply chains towards local and circular practises. It also underscores the growing significance of the consumer and the last mile in the supply chain, leading to the emergence of micro- fulfilment centres (MFCs) as local 44 CEO MIDDLE EAST 16-30 NOVEMBER 2023 lthough Dubai has become a city where skyscrapers touch the sky and ambi- tion knows no bounds, burnout has become an alarming concern. While the city is known for its opulence and rapid development, it’s also a place where the pursuit of success often comes at a price; burnout. Burnout is no longer merely a buzzword; it’s a real and pervasive issue that affects individuals, businesses and the entire community. Defined by the World Health Organisation (WHO) as a syndrome resulting in chronic workplace stress, burnout is characterised by feelings of exhaustion, cynicism, and reduced professional efficacy. It doesn’t dis- criminate and can affect anyone from working class to wealthy executives burnout is affecting everyone. Dubai’s relentless pace of life, characterised by long working hours, intense competition and high expectations, has created a fertile ground for the burnout epidemic to flourish. According to a study by the International Stress Management As- sociation (ISMA), Dubai consistently ranks high in stress levels among its residents. Factors such as job-related stress, financial pressure, and the constant need to keep up with the city’s extravagant lifestyle contribute to the escalating burnout crisis. Burnout takes a high toll on indi- viduals and society as a whole. On a personal level, it can lead to a host of physical and mental health problems, including chronic fatigue, anxiety, depression, and even cardiovascu- lar issues. In Dubai, where the work culture often emphasises productivity and career progression at any cost, these symptoms are alarmingly com- mon. The motto “Work hard, play hard,” rings true in Dubai and the cost of not letting yourself rest or take care of your mental health and wellbeing leads to several long term health is- sues both physically and mentally. Dubai’s relentless pace of life, characterised by long working hours, intense competition and high expectations, has created a fertile ground for the burnout epidemic to fl ourish BURNOUT IS REAL: WHY WE MUST TAKE ACTION NOW Buzzword. Simmonds discusses how burnout is a real and pervasive issue that affecrs entire communities. WELLBEING BY KAI SIMMONDS, MINDSET & WELLBEING COACH & SPEAKER AWELLBEING 16-30 NOVEMBER 2023 CEO MIDDLE EAST 45 “ADDRESSING BURNOUT IS NOT JUST A MATTER OF PERSONAL WELL-BEING.” A real issue. Burnout can lead to talent drain as individuals seek less stressful and more fulfilling environments. Burnout also affects relationships, as those experiencing burnout often find it difficult to engage fully with their loved ones. Furthermore, the blurred lines between work and per- sonal life in Dubai make it challeng- ing for individuals to disconnect and recharge. Many residents find them- selves perpetually on call, leading to chronic stress and eventual burnout. Ignoring these warning signs can negatively impact one’s quality of life. Due to burnout, several of my clients share how difficult it is to find time to connect with others and often end up feeling lonely and disconnected which in a place full of expats is even more difficult as most of them are already away from their families in their home country. for employers. Consequently, it af- fects a company’s bottom line and the overall economic health of the city. Burnout can also lead to talent drain, as individuals seek less stressful and more fulfilling environments. One of the exercises I do with my clients is called their “Burnout Bill.” This is a power exercise to help them reflect and write down all the time and money they have lost due to Burn- out, and the numbers are startling as some Burnout Bills run into the tens of thousands in USD. The worst part is that unless you make a change in your lifestyle your Burnout Bill will only get bigger and more expensive. Addressing burnout is not just a matter of personal well-being: it is essential for the overall health of our Burnout isn’t just a personal issue, it has far-reaching economic conse- quences. In a global business hub, where innovation is key, burnt-out employees are less productive and creative. High levels of burnout can lead to absenteeism, high staff turno- ver, and increased healthcare costs WELLBEING 46 CEO MIDDLE EAST 16-30 NOVEMBER 2023 society and economy. There are actu- ally 12 stages of Burnout, as defined by Herbert Freudenberger, a German- American Psychologist who first coined the term “Burnout” in 1974. Instead of waiting till you hit that 12th stage, take action now to prevent it from getting worse and to break the Burnout cycle. Here are a few compelling reasons why we must take action now: 1. Health and well-being: burnout takes a toll on our physical and mental health. Ignoring it can lead to more severe health issues down the line. By taking action to prevent and mitigate burnout, we can improve our overall well-being. The longer you wait, the worse it gets, thinking burnout will go away on it’s own is a myth! 2. Productivity: burnout hampers productivity and creativity. When people are burned out, they are less effective at work and less likely to contribute their best ideas. Ad- dressing burnout can lead to a more engaged and productive workforce. 3. Economic Impact: burnout costs businesses billions of dollars each year. By addressing the issue, organisations can reduce turnover, absenteeism, and health care ex- penses, ultimately improving bottom line. Several top tech companies such as Microsoft, Nike, Google, Accen- ture, Salesforce all have prioritised their employee’s wellbeing and this allows them to attract high quality talent, retain staff with a positive company culture and dominate in their industry. 4. Personal fulfilment: burnout robs individuals of the joys and fulfil- ment they should derive from their work and personal lives. Taking ac- tion to prevent and manage burnout can help people lead more fulfill- ing lives and pursue their passions. Burnout steals time, time away from loved ones, time away from joy and time away from the things that make you happy which are important to a fulfilling and healthy life. So, what can we do to combat burnout? Firstly, set boundaries. Establish clear boundaries between work and personal life. Disconnect from work emails and tasks during your off-hours. Stop working “hard,” work “smart” instead and rest “hard.” Our mind and bodies are more pro- ductive when we give ourselves time off to fully recharge. Prioritise self-care and engage in activities that relax and rejuvenate you, such as exercise, meditation, or hobbies. Self Care is different for everyone, so give yourself some time to explore and experiment with dif- ferent exercises and activities that you enjoy, Yoga is great, but it’s not for everyone. Seek support and don’t be afraid to seek support from friends, family or a therapist if you are experiencing Addressing the issue. Overcoming burnout can lead to a more engaged and productive workforce.x BILLIONS Burnout costs businesses billions of dollars each year.WELLBEING 16-30 NOVEMBER 2023 CEO MIDDLE EAST 47 burnout. Oftentimes my clients come to me because they don’t feel com- fortable talking about their mental health struggles with their families and friends. Slowly, things are chang- ing towards being more open about your mental health but don’t be afraid to get external help if needed. Talking about your feelings can be incredibly therapeutic. Importantly, employers can play a significant role in address- ing burnout by promoting a healthy work environment, offering flexible work arrangements and providing resources for mental health support. It’s also important to raise awareness about burnout and its consequences. Education can help individuals and organisations recognise the signs and take proactive measures. One of the biggest issues I see is that they don’t have the correct knowledge on what stress is and how to manage it. There are several tools and exercises that you can do on your own to help man- age your stress to prevent burnout. Investing in a Mental Health Expert or Professional can provide you with the knowledge, tools and exercises to help you manage your stress better and prevent burnout. Ultimately, burnout is a genuine and growing problem in Dubai and it’s high time we take action. It’s essential that we take action now to address the issues, for the sake of our health, productivity, and overall well-being. By raising awareness, implementing workplace initia- tives, involving the government and fostering a supportive community, Dubai can work towards a healthier, happier, and more productive future for its residents. As a leader in the MIddle East in several industries, Dubai’s progressive mindset is what sets it apart from other places and the perfect example as a leader in Mental Health and Wellbeing in the Middle East. Burnout is real, but with collective effort and determina- tion, it can be combated effectively, ensuring that Dubai remains a city of dreams without the nightmare of burnout looming over its residents. Self care is key. When you prioritise self care and engage in activities to relax and rejuvenate, you can overcome burnout. “BURNOUT HAMPERS PRODUCTIVITY AND CREATIVITY.”Next >